eBookPlus’ Ad-Supported eBooks Are a PipeDream

There's a new digital publishing startup called eBookPlus and it has been getting a lot of attention lately (here, here, here, here, here). This company is reviving an old business idea that had been tried with paper books (and discarded when it didn't work):

Advertising

eBookPlus wants to sell adverts inside ebooks and then give away the ebooks in the hopes that the vast increase in downloads will make up for the loss in sales.

Sorry, but I don't buy the hype.

First, I've been handling the adverts for this blog, and as anyone who runs a website can tell you there is not much money in advertising. I am a moderately successful blogger and if I told you how little I am earning in ad revenue you would assume I was lying.

Second, eBookPlus is incredibly over-optimistic about the number of eyeballs they're going to get. In particular, the press release is mostly BS and is also based on a number of flawed assumptions:

eBookPlus was created upon the realization that free eBooks were 100 times more accessed than eBooks that cost 99 cents. The calculation for authors is simple: if authors today get 30 cents by selling their eBooks for 99 cents, they will get 30 dollars if they sell 100 copies. If free eBooks are up to 100 times more accessed and if authors are to get an average of 3 cents per chapter in an eBook containing 10 chapters, authors would get the same 30 cents by having their eBook on eBookPlus.

For authors who sell 100 copies for 99 cents, the same titles will have at least 10,000 accesses for free once the free eBook is accessed 100 times more. As such, eBookPlus will prove a great marketing tool for indie authors and for publishers who have not yet developed sales in eBook format from their catalogues.

One thing that eBookPlus failed to mention is that 10 thousand downloads doesn't mean 10 thousand people actually read the ebook and seeing the advertising. Anyone who studied the phenomenon of pirated ebooks could have told you that the actual engagement rate is low (5% is the high end). In other words a freely available for download ebook might get lots of downloads, but many of those potential readers are either going to add it to their existing hoard unread or they will simply lose it in the TBR pile.

And when you combine the first caveat (low actual ad revenue) with the second caveat (low engagement rate) you end up with a situation where the average indie author is probably not going to make much money.

But that's okay because the advertising eBookPlus plans to offer is so obnoxious I expect it to be abandoned inside of a year:

eBookPlus.com offers any company the opportunity to create publicity to place in an eBook, whether it is a video, an image or a HTML page. The advertising is unobtrusive, placed only at the beginning of each chapter, volume or part of a particular title. This advertising is presented to readers for a few seconds, after which they can read the eBook normally without interruption during the whole of the chapter.

If you think an ad at the beginning of each chapter which cannot be skipped and locks your device for a few seconds is unobtrusive, well, I really don't know what to say to you.

I think the combination of a lockdown and the jarring discontinuity between the ad and the ebook content will almost certainly drive readers to abandon the ebook in favor of one that is less aggravating. As one reader reminds me in the comments, Amazon's ads on the Kindle are about as unobtrusive as possible and it still has some people up in arms.

And given the vast quantities of both free and ad-free ebooks, it's going to be difficult to get the reader to come back after they've been driven away. Furthermore, the "free" ebooks with embedded ads are only going to be accessible via the eBookPlus website and apps (not yet available). So once the reader abandons the eBookPlus app in favor of their preferred reading app, it's going to be doubly difficult to get them back.

Oh, and it looks like the adds on the eBookPlus website are blocked by AdblockPlus (unless they simply aren't enabled yet). So the online revenue stream is going to be even smaller.

One other reason that I am less than excited about ad-supported ebooks is that Wowio tried out the idea of ads in ebooks (and even invested a lot of money in getting the idea patented) before abandoning it. Well, I wouldn't say that it was abandoned so much as when I checked today Wowio only offers a single ad-supported ebook.

Wowio's ads were less obnoxious than the ones eBookPlus plans to offer, and the only ebooks I encountered them in were graphic novels (downloaded as PDFs). I did not care for them at the time but I knew of a few readers who didn't mind the ads.

And yet Wowio isn't offering them anymore.

Speaking of Wowio, this ebook retailer was founded in 2006 but has not received much attention lately. The latest news I can find is that they went through a funding round in 2010. The site is still operating so my guess is Wowio is supporting itself on sales of ebooks and graphic novels - not by selling ads.

Frankly, if eBookPlus is still selling ads in ebooks a year from now I will be deeply surprised.

It's not just that Wowio patented the idea and could probably kill eBookPlus with a single letter, but also that I don't see how this model is going to generate any serious amount of money for authors and publishers. And even if eBookPlus does generate income, they plan to be exceptionally obnoxious in where they place the ads. I expect that that alone will kill off interest among readers.

23 thoughts on “eBookPlus’ Ad-Supported eBooks Are a PipeDream”

This just brings to mind all the ways in which companies are looking to make a profit from someone else’s work at little or no cost. I understand the motive but that doesn’t make me like it any better.

The Kindle’s lock screen and stripe at the bottom of the home screen is about as unobtrusive as it gets and people still lose their shpadoinkle. I can’t see many people—authors included—putting up with ads between chapters.

I have to wonder if the actual business model is not revune from the ads in ebooks but selling the idea of ad revune to investors.

I will never go for ad supported ebooks: not for discounted books, not for free books. I even reject the Amazon SO Kindle.

The cigarette ads in mass market paperbacks were annoying, but not too awful. But even if each ebook had one cigarette ad, the revune would probably be too small to pass on to the buyer. I’m guessing $0.10 to $0.05 or less. Not worth it.

Dear Mr. Nate Hoffelder, I sincerely hope that you do not moderate this letter.
It’s very clear here in your post (which I cannot call “Article”) that you’re not aware of the prices for the current market of adverts. If you do not make money from adverts, perhaps, It’s due to you might be offering banners with the CPM (cost per Thousand) in your website. If we consider the CPC (Cost per Click) and CPV (Cost per View) model, it will be clear that the values are higher than CPM. So, before you post something like that, the journalist/blogger in order to be responsible for what is written, has to make a deep research before committing such mistakes and blaspheme on something ones does not know indeed.
If you make a brief research you’ll see that Youtube shows videos with ads at the beginning for a few seconds, some of them you can skip after 5 seconds and others just after 30 seconds. Do people complain about that? Is that unobtrusive? The answer might be yes or not. I myself and millions of people around the world do not care about ads in exchange for something for free. Have you ever thought if Youtube starts to charge for its videos, because people don’t want to see ads? The entertainment and knowledge that Youtube brings to us would be significantly impaired. Youtube charges around 0.50 to 2.00 USD per view. Do you really think this price is that low? I’m not saying that is what we charge from our advertisers, but, that you Mr. Hoffelder are completely not aware or you just pretend you’re not aware of the prices charged. If we consider the social network, Facebook for example charges 0.50 to 2.00 dollars per Click for its ads and that is exactly what Google charges for its sponsored results for a quick search.
We’re not launching a system of advertisement within eBooks to compete or to end the sales of eBooks. There will always be eBooks sales and there are those who don’t want to pay not even 99 cents for an eBook so they can have an extra option via sponsored eBooks, since the will be able to read much more books easily without worrying about spending money on something they might not enjoy or even read.
eBook will keep on selling very well and with our system sales can raise once people can read for free with ads at the beginning of the chapters and if the really enjoy the eBook, they can consider purchasing one without ads and own them for good or until the company that holds the DRM rights decides to remove the eBook from the user’s device without any warning.
Another giant mistake you made was to try to compare us to Wowio which has a completely different business model (you should really have done your homework Mr. Hoffelder). First of all, their main focus is not ads inside eBooks. Second of all, not all companies are able to advertise with them, they do not have a self-service system. Companies interested in advertising with them should spend a lot of money. You might have forgotten to talk about another great “case” of advertising inside eBooks (have you really forgotten or it was just for convenience?) I’m talking about the company “BookBoon”. It’s a publisher which makes PDFs available for free with ads. If I’m not wrong they have a catalogue of 1000 different title and only in 2012 they had 11 Million downloads. Alright, some of those downloads shall not be effectively read, however, that shows us there are a lot of people who don’t care about advertisement inside eBooks since they are for Free.
What’s the problem to manage advertising inside eBooks in order to make them available for Free and much more accessible? Are you against the dissemination of the culture and knowledge? As far as I could understand, you Mr. Hoffelder may not watch TV, because it has advertisement, or even cable TV which also has advertisement (and you pay for that), you may not got to the movies because you will find advertisement there right before the movie, or you may not read magazines, access Youtube videos and meet your friend via Facebook, because believe it or not you will find advertisement there too! So I can assume you Mr. Hoffelder might be completely isolated from the world and as you seem not to enjoy advertisement, shall not be aware of the trends the market has to offer. How do you expect to make money from the ads in your website if you are clearly against publicity?
If there are people willing to pay nothing for an eBook in exchange for an ad at the beginning of each chapter, why are you against that?
As far as I’m concerned, the author will be paid for that! The eBook with advertisement is not stealing money from the author; on the contrary, it’s bringing more money to the author. Before people used to spend time looking for Free books and sometimes illegal ones and now they can keep on reading for free and the author is paid for that.
This business may not succeed? Sure, because it’s something completely new, and if it goes wrong it’s not because people are not willing to read for free with ads, but for some authors and publishers that might still be skeptical with this business model and biased bloggers like you. Authors who want to make money will join us, after all they have worked hard put their ideas forward on a book, and they want to share them with everyone else and also monetize for their job. Most authors will surely upload their eBooks with us because they know there are people who wouldn’t buy their eBooks but would read them if they were for Free. Such author will be able to reach a huger number of people, and in a moment in which self-publishing is not everywhere it’s not going to be successful.
Another thing you Mr. Hoffelder are totally not aware and you should have been well informed before publishing concerning to the patents. There is no Patent for an idea! What is relevant is the HOW-TO implement such idea. In other ways, Microsoft and Yahoo which also have both of them patent for advertisement inside eBooks would be suing each other. Do you think Wowio, Microsoft and Yahoo will start a fight?
We have our patent for this business model and the idea itself of advertisement inside eBooks cannot be patented just the process How-To, do you get it now?
You said anyone who watches pirated eBooks could have told me that the actual engagement rate is low (5% is the high end). How can you assure something like that? Based on what? Is there a survey with people who download illegal eBooks and if they’re actually reading it or not? It just doesn’t make any sense a person download something which is not going to be used at all. The person may not use that at the first moment, however, that will be kept to be used later.
Did you know that a lot of people who PURCHASE eBooks or even paper books end up reading just a few pages or not even reading? Isn’t that amazing? That’s called acquisition by impulse and it happens all the time, people downloading and buying eBooks that won’t be read. If they only had a way to read for free before wasting their money on something that won’t be read and for that here we are, to connect Authors, Advertises and Readers, you like it or not.
If you want to talk more about that you can contact me anytime.
Sincerely
Leo Mark
CEO
eBookPlus, Inchttp://eBookPlus.com

I was not certain how I should respond to your comment so I waited. Allow me to address some of your complaints, in order:

“Blaspheme”? I’m not going to touch that one with a 10 foot pole, though I will not that this is the first time I have been accused of blasphemy.

Payment rates

You mention Youtube, and that they charge $.50 to $2 per view. What you left out was that they pay the significantly less than they charge. Every indication I have found says that Youtube pays between $2 and $5 for a thousand views of an advert. Do you really propose to pay authors $5 in exchange displaying an advert a thousand times? That’s not a lot of money.

You’re also not nearly as big as Youtube so you won’t be able to charge the same rates. And so far as I can tell Facebook doesn’t pay anything to the owner of the page that has adverts, so I’m not sure that strengthens your case.

Also, your placement for the adverts is not remotely similar to Youtubes. You plan to disrupt the expected reading experience by placing ads at chapter headings, while Youtube places adverts where they only minimally disrupt the viewing experience.

Your advert platform would more closely resemble Hulu or broadcast TV, and as you know many tv viewers do their best to avoid having to watch commercials. Clearly they think the ads are undesirable.

“people can read for free with ads at the beginning of the chapters”

This is an example the fundamental weakness of your concept. People already read for free without adverts. There is currently far more ad-free free content than can be read in a lifetime, including good stuff from good authors and publishers.

Why would anyone choose to stay and read an advert-encrusted ebook when they can go read a title in the same genre that doesn’t have adverts? I don’t see why they would.

There is no Patent for an idea!

I’ll grant you that I could have been more careful on how I phrased that, but then again I follow news about software patents. Some of the software patents I have read about are so basic that yes, an idea was patented.

And I didn’t forget Bookboon. I skipped them because I didn’t want to point out that the several ebooks I tried had the same level of quality as content farms. I seriously doubt that very many people downloaded more than a single title – just enough to discover the low quality.

What’s the problem to manage advertising inside eBooks in order to make them available for Free and much more accessible?

eBooks don’t need ads to make them free, as I pointed out above.

Are you against the dissemination of the culture and knowledge?

No comment.

As far as I could understand, you Mr. Hoffelder may not watch TV, because it has advertisement, or even cable TV which also has advertisement (and you pay for that), you may not got to the movies because you will find advertisement there right before the movie, or you may not read magazines, access Youtube videos and meet your friend via Facebook, because believe it or not you will find advertisement there too!

I don’t watch TV, don’t read magazines, and don’t use Facebook. I avoid the latter because I see no reason to use it, and I gave up on the first 2 because there are better ways for me to get content than the ad-encumbered magazines or broadcast tv.

The ads in front of movies annoy me as well, yes, but I generally bring a book so I can ignore them. And as for Youtube, I rarely see adverts on it, and when I do I usually close the browser tab rather than watch the advert.

I’m a bit surprised that this company doesn’t understand the psychology of readers very well. Folks who go for pirated books (as opposed to “free” books on reseller sites), do NOT convert into buyers who pay for books or advertising for that mater. They are not a target audience for any publisher or author who is savvy about the publishing market.

They were right about the 100 to 1 rate of freebies to paid books ratio, however (Smashwords published that last April 2012). But the free market has been so saturated, that the authors are starting to not go this direction. Also, Amazon has quashed the sites that promote free. So now there is a movement against it. Again, those readers don’t convert well or at all to paid readership, which is not a quality group you want to advertise to.

And no, authors are not going to offer their books soley through eBookPlus for free, because they would be dropped from all other sites where they make good money. The advertising model cannot currently compete with the royalties. And may never…so why would I take my books down from other sites to bet on this new model?

Frankly, the whole concept of eBookPlus is based on what numbers, what reasearch? No author I know in the indie community would NOT laugh at their video, it was so off the mark. Indie authors are especially savvy business folks right now; we already got screwed by traditional NY Publishing, so we are not looking for a new shackle and chains.